Vaccine distribution as a key to unlocking pent-up travel demand, says Booking.com CEO

Glenn Fogel, president and CEO at Booking Holdings and CEO, Booking.com talks about post-covid travel, how business has changed in the past one year and vaccine distribution as a key to unlocking pent-up travel demand.

Business recovery in the Covid-19 impact

“2020 presented the biggest disruption to modern global travel the world has ever seen and our results for 2020 were down substantially from 2019. However, travellers still booked 355 million room nights through our platforms during 2020 and we ended the year with profits at approximately $880 million in adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization). With vaccines in place and pent-up travel demand, we are optimistic about business recovery and have positioned our business well for when travel demand returns. However, we have a long way to go before we reach pre-covid levels,” Fogel said.

In the first quarter of this year, gross travel bookings – the value of bookings for rooms, car rentals and air tickets – were $11.9 billion, a decrease of 4% from the same period in 2020.

Room nights booked in the first quarter decreased 20% year-over-year, while air ticket bookings increased 62%. Fogel says Q1 brought the highest number of air tickets ever booked in a single quarter for the company and continuing to build the flight product on Booking.com is a priority for the future as part of the long-term connected trip strategy.

Pent-up travel demand

People have a very strong desire to travel. We saw this first-hand in 2020 when we witnessed a strong improvement in our booking trends from the lows of April through the peak summer travel season, driven in part by pent-up demand as people came out of lockdowns. In 2021, we expect domestic travel to be top of mind and are seeing early signs of encouraging summer booking trends in the US and even parts of Western Europe, primarily in the UK and Germany, relative to what we are seeing globally.

3-4 years for full recovery of travel industry

Warning about the long years of full recovery in international travel and how governments need to be cautious about reopening borders, he said: “While the pace of vaccine distribution remains frustratingly slow in most places around the world, Israel, the UK and the US are benefiting from successful vaccine distribution programme. In each of these countries, we have seen encouraging booking trends, which supports our view that vaccine distribution is key to unlocking pent-up travel demand.”

Sluggish growth of domestic travel, Asia recovered the least

There has been a strong domestic room night growth in Russia and Australia. Airline tickets booked rose 49% in the first quarter versus 2019, driven by robust growth at the company’s Priceline, Booking.com and Agoda brands. While demand in Europe improved sequentially, the travel agency has witnessed trends soften towards the end of March, driven by new travel restrictions, he added.

In Asia, room night declines worsened in April from the prior month, hit by slow vaccination progress and government-imposed restrictions to tackle rising COVID-19 cases. Asia was the least recovered region in April.

“This year we’ll be focused on enabling travelers to book the major elements of their trip in one place on Booking.com. This means we are working to build up our non-accommodation products like flights, ground transportation and attractions by increasing supply as well as exposing more of our customers to these products,” he said.

Booking.com’s flight offering

The flight offering is now full native in the app and live in 18 countries, which collectively represented more than half of the brand’s room nights booked in 2019. “We hope in the long run that this connected trip, which is all the things people do when they are traveling will create something that makes them want to always use our app more than anything else. So when they think of travel they come back to us,” Fogel added. Currently more than two-thirds of the company’s bookings come through mobile devices, the majority of which are done in the app.

Along with flights, the company will continue to work to engage with travellers in destination by growing Booking.com’s supply of attractions and experiences – current partners include Viator and Musement – and to continue to build its integrated payment platform.

The company continue to invest in efforts to strengthen its brand, citing the recent ‘Back to Travel’ promotion in the US as an example of the marketing methods it will use in the future. A similar promotion launched in the UK, giving travellers a 10% post-stay credit.